[Hague-jur-commercial-law] Peter Trooboff Article on The Hague project

[Svantesson]

Dear friends,

I have read Peter Trooboff's well-written and informative article, which
Manon kindly posted to the list. The article highlights a few problems with
the proposed Convention.

In the context of the provisions that provide a state with the right to
refuse enforcement, Mr Trooboff stated that: "These provisions are designed
to maintain internationally the delicate balance of respect for agreements
and commercial stability with protection for weaker parties". This is
certainly true, and the protection so provided should not be underestimated.
The typical contractual party deserving extra protection would ordinarily
only have assets in one state and if enforcement cannot be effected there,
due to these provisions, the weaker party is rather well protected. However,
there are at least two serious downsides with this approach. First, it would
seem that in many, not to say most, weak party-strong party relations it is
the weaker party that is trying to get a judgment against the stronger
party. In such situations the structure of the suggested Convention provides
little comfort. Secondly, the chosen structure is extraordinarily wasteful
when it comes to the costs associated with international litigation. By the
time, in the process, a party can rely on non-enforcement, it is possible
that both the parties to the dispute, as well as the society at large, has
spent considerable amounts of money on the litigation.

I acknowledge that I probably have starting to sound like a broken record by
now, but surely it would be better to include a balancing provision already
at the stage of the initial trial (i.e. to not uphold the forum selection
clause if it is unfair)? As I have suggested before, the proposed Convention
would do well to include a provision along the lines of Article 4 paragraph
3 of the 1965 Hague Convention on the Choice of Court: "The agreement on the
choice of court shall be void or voidable if it has been obtained by an
abuse of economic power or other unfair means." This would admittedly lower
the predictability of the Convention, but predictability must always be
balanced with flexibility (i.e. justice in the individual case). As pointed
out by Mr Trooboff, a will to strive towards such a balance exists in the
US, it certainly exists in Europe and to my knowledge it is a common
component in most legal systems.

If many domestic systems already have in place mechanism to deal with this
balance, one could perhaps question the need for such a balancing to be
included in the proposed Convention. However, I have no doubt that the
talented company lawyers that construct the choice of forum clauses will be
able to identify forums that not only provide them with favourable liability
limitations but also with party autonomy of the kind that would uphold also
unfair choice of forum clauses. In other words, a stronger party nominating
a forum would not choose a forum that would hold their choice to be invalid.
Consequently, the fact that the validity of the choice is judged by the
chosen forum is troubling.

Another troubling issue, highlighted by Mr Trooboff, is that the proposed
Convention is referred to as a "business-to-business" convention, while in
fact it is a convention covering all sorts of parties except consumers and
employees. It could, of course, be said that the term B2B is used for
convenience, but I think this simplification is unsuitable as it easily
distorts the picture of what is actually under negotiation.


Best regards,

Dan Svantesson.

Dan Svantesson
PhD Research student
Faculty of law
University of New South Wales
Syndey, NSW 2052
Australia


-----Original Message-----
From: hague-jur-commercial-law-admin@venice.essential.org
[mailto:hague-jur-commercial-law-admin@venice.essential.org] On Behalf Of
Manon Ress
Sent: Friday, 30 January 2004 6:25 AM
To: haguelist
Subject: [Hague-jur-commercial-law] Peter Trooboff Article on The Hague
project

Peter D. Trooboff, Covington & Burling (a member of the US Delegation for
The Hague project) has just published a short article on the proposed Hague
Convention in NLJ.  Comments are welcome.

http://www.cptech.org/ecom/jurisdiction/trooboff2004.pdf

--
Manon Anne Ress
Consumer Project on Technology
www.cptech.org
PO Box 19367, Washington, DC 20036
manon.ress@cptech.org, voice: 1.202.387.8030, fax: 1.202.234.5176


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